Hypothetical situation regarding dollar vs peso

Peso is closing in on 3.8 to the dollar, the mid term election has ended, now what?
 
bigbadwolf said:
The article does go on to explain that while this system of variable-goods was not used, it was mimicked by giving lower weightings to good rapidly rising in price. Cumulatively, annual inflation is underreported by about 7%. Thus if 2% is the official rate, a more accurate estimate would be 9%. So if an American received a pay rise of 3% (in the good days, not today) and the official rate was 2%, then by golly, he should be more prosperous than ever. And yet his or her budget was more strained than ever. And then rent-a-pundits would appear on television decrying the McMansions and SUVs, blaming the culture of consumption rather than the true culprit: higher cost of living.
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I'm from the UK and I guess similar tricks have been played on us.

We're always lead to believe that our standard of living is constantly getting better and better, but I think that has been in reversal for decades. if you take someone in a good solid career, say a family doctor or an architect, in what way are they better off now than in the 1950s? OK, they have a PC, wide-screen TV and various other electronic gizmos, but that's about it. In the 50's bringing up a family in a nice house with the latest equipment and a nice holiday every year was affordable - ON ONE SALARY.

First we were persuaded that every woman had a right to work (quite right, too), then it became normality, Soon after a necessity. Eventually a lot of families could hardly survive with both adults working - a big problem when everything depends on consumptiona and growth. The answer? Debt - make it easy and sociably acceptable to borrow, borrow, borrow.

We've just seen where that leads to. I guess the 20th century has just ended - the 21st will be interesting!
 
I don't with what people you hang out with but all my friends who are in there 30's or 40's in Europe and have a family own atleast a 500.000 dollar home(up to 5 milion dollar) have 2 cars, go on holiday multiple times, have good jobs or own a company. And they often have a second home and/or a boat/car and have expensive hobbies

I didn't see that change the last 10-15 years. In Spain this is changing but that's a country that is really hard hit by the crisis. Probally the same for a country like Ireland
 
BlahBlah said:
I don't with what people you hang out with but all my friends who are in there 30's or 40's in Europe and have a family own atleast a 500.000 dollar home(up to 5 milion dollar) have 2 cars, go on holiday multiple times, have good jobs or own a company. And they often have a second home and/or a boat/car and have expensive hobbies
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This is not the general rule in Europe, where a whole generation of young people is getting by on 1,000 euros a month as salary. The people who own the kind of house you're talking about and didn't inherit it are probably deeply in debt. If you look at per capita income figures and compare them with the general cost of living, what I am saying will make sense. The majority of people do not have "good jobs" or own companies.
 
harpo said:
We're always lead to believe that our standard of living is constantly getting better and better, but I think that has been in reversal for decades. if you take someone in a good solid career, say a family doctor or an architect, in what way are they better off now than in the 1950s? OK, they have a PC, wide-screen TV and various other electronic gizmos, but that's about it. In the 50's bringing up a family in a nice house with the latest equipment and a nice holiday every year was affordable - ON ONE SALARY.

First we were persuaded that every woman had a right to work (quite right, too), then it became normality, Soon after a necessity. Eventually a lot of families could hardly survive with both adults working - a big problem when everything depends on consumptiona and growth. The answer? Debt - make it easy and sociably acceptable to borrow, borrow, borrow.

We've just seen where that leads to. I guess the 20th century has just ended - the 21st will be interesting!
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The US and the UK have gone down the same road to hell in lockstep -- that's why we talk of the "Anglo- American model." I don't know about inflation stats but Thatcher started to fiddle with the unemployment stats about 30 years ago and must have introduced about a score of alterations in the decade she was in office. New Labour let the changes stay in place.

Electronic gizmos have become ubiquitous but the general standard of living (not to mention the quality of life) hasn't gone up that much (in my opinion). Big ticket items like housing are more expensive in real terms than 30, 40, or 50 years ago. In addition, what jobs there are tend to be poorly paid and equally importantly, insecure.
 
bigbadwolf said:
This is not the general rule in Europe, where a whole generation of young people is getting by on 1,000 euros a month as salary. The people who own the kind of house you're talking about and didn't inherit it are probably deeply in debt. If you look at per capita income figures and compare them with the general cost of living, what I am saying will make sense. The majority of people do not have "good jobs" or own companies.
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That is the rule in the north of Europe atleast for someone who works hard and comes from a family with good moral values.

GB is a bit different because there was never a big middle class, atleast not of the same size of Holland, (west) Germany, Scandinavia or even Belguim and France.

There is no problem to be in depth as long as your income is growing and it's supported with a property that in the long run always keeps his value
 
BlahBlah said:
I don't with what people you hang out with but all my friends who are in there 30's or 40's in Europe and have a family own atleast a 500.000 dollar home(up to 5 milion dollar) have 2 cars, go on holiday multiple times, have good jobs or own a company. And they often have a second home and/or a boat/car and have expensive hobbies

I didn't see that change the last 10-15 years. In Spain this is changing but that's a country that is really hard hit by the crisis. Probally the same for a country like Ireland
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That $500,000 plus house, holidays, etc is paid for on debt.

OK, we (nearly) all need a mortgage to buy a house, but traditionaly in the UK that was 3 to 3.5 times your annual earnings. Until recently, 6 or 7 times earnings and 100% loans, were easy to get - that drove up house prices. Then the whole bubble burst and I guess your friends' houses are worth a lot less now. Still, it doesn't matter - a house is somewhere to live and it means nothing if it's valued at $5,000,000 or $,5000 (as it probably was in 1950) it's still the same four walls.

As for the holidays - probably a good time to cut back on them a bit.
 
That $500,000 plus house, holidays, etc is paid for on debt.

And how did you find out that?

OK, we (nearly) all need a mortgage to buy a house, but traditionaly in the UK that was 3 to 3.5 times your annual earnings. Until recently, 6 or 7 times earnings and 100% loans, were easy to get - that drove up house prices. Then the whole bubble burst and I guess your friends' houses are worth a lot less now. Still, it doesn't matter - a house is somewhere to live and it means nothing if it's valued at $5,000,000 or $,5000 (as it probably was in 1950) it's still the same four walls.

England is not Europe. There are still plenty of places in Europe where houseprices are not going down or just slowly
 
BlahBlah said:
England is not Europe. There are still plenty of places in Europe where houseprices are not going down or just slowly
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I'm in one of the richest European countries -- Norway. Prices have been going down for -- oh, I'd say 15 months. It takes the income of two fairly well-paid people to afford a house. The fairly basic wooden house I'm living in is valued at 6m kroner (about $1m). There's been an asset bubble here as well. Young people cannot afford to buy houses and even rents can be very high. Meanwhile job security isn't what it used to be. Unemployment among the U-25s is 26% in Sweden next door. Even here in low-unemployment Norway, it's not at all easy to get a real job -- many new graduates are having to settle for various kinds of temp work. Granted, the country's not in the mess the UK is but I wouldn't say the situation is great. And it's considerably worse in countries like Germany and France at the moment.
 
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